Four year after being caught with their fingers in the parliamentary cookie jar, politicians are finally putting their affairs in order.

A parliamentary select committee has agreed to redefine the legal meaning of electioneering to make it clear that public funds cannot be used for pledge cards and other campaign material.

The change is contained in the bill that replaces the odious Electoral Finance Act – Labour's attempt to tilt the electoral playing field in its favour by restricting the rights of its critics to express themselves in election year.

The new bill loosens the restrictions but, regrettably, does not remove them. Justice Minister Simon Power has put broad parliamentary consensus ahead of his National colleagues' views, who loudly opposed any restriction on free speech when Labour and its allies pushed the Electoral Finance Bill through in 2007.

The $120,000 cap Labour put on so-called third-party advertising for up to 11 months of election years has been replaced by a $300,000 cap in the three-month pre-election period.

That will allow moderate-sized advertising campaigns, but it is still a restriction on free speech.

Labour and the Greens argue that the cap is necessary to prevent wealthy interests "buying" elections. However, that could have been achieved without compromising free speech simply by requiring those who want to spend large amounts of money broadcasting their views to disclose their identities – something the new bill already requires them to do.

Voters are not stupid. If they know who is paying for advertising campaigns, they know whose interests are being served.

Mr Power has also balked at reforming the broadcasting regime that unfairly advantages incumbent parties and politicians for the same reason.

He could not gain widespread parliamentary support for changes to the system, which gives the major parties the lion's share of broadcasting funds and prohibits their opponents from buying TV and radio time with their own money.

On the other side of the political fence, critics will quibble at the abandonment of plans to make big contributors reveal the identity of "associated entities" – a measure intended to stop them routing contributions through different bodies to avoid having to disclose their identities.

The select committee's alternative – making it an offence to divide contributions among different bodies for the "express purpose" of avoiding the disclosure regime – is toothless. It will be difficult to identify associated entities and next to impossible to prove intent.